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[2012] ZALCJHB 58
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Northam Platinum Ltd v Phooko NO and Others (JR3457/09) [2012] ZALCJHB 58 (27 June 2012)
Reportable
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA,
JUDGMENT
case
no: JR3457/09
In the matter between:
NORTHAM PLATINUM LTD
Applicant
and
M E PHOOKO N.O
First Respondent
COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION
Second Respondent
NATIONAL UNION OF MINEWORKERS OBO J L NTHOLENG
Third Respondent
Heard
:
31 May 2012
Delivered
:
27 June 2012
JUDGMENT
BHOOLA J
Introduction
This is an application in terms of section 145 (2) of the Labour
relations Act, 66 of 1995 (“the LRA”), to review
and set
aside an award made by the first respondent ("the arbitrator").
Background facts
Mr Ntholeng (“the employee”) was a machine operator who
was dismissed on 21 April 2009 following a safety related
incident
which occurred on 11 February 2009. He was charged at a disciplinary
enquiry held on 11 and 12 March 2009 with misconduct
in that he
endangered his safety and that of fellow employees by forcefully
trying to gain access to a cage after the onsetter
had signalled
that it could not move. He pleaded guilty to the charge and the
chairperson of the disciplinary enquiry imposed
a final written
warning.
Thereafter, on 8 April 2009, Mr D J Gonsalves, the General Manager
of the applicant, issued a memorandum to him informing him
that the
sanction of a final written warning had been altered to a dismissal.
The memorandum explained that this was in consequence
of the
seriousness of the offence and his actions could not be condoned.
The employee was given the right to make written submissions
by 14
April 2009 should he feel that the sanction of dismissal was unfair.
He duly made representations in writing on the issue.
On 20 April
2009 Gonsalves advised him in a further memorandum that his
representations had been considered but since his conduct
was
unacceptable, dangerous and placed the health and safety of
employees at risk he had no option but to confirm the sanction
of
dismissal. The employee was dismissed the next day and lodged an
appeal following which he referred a dispute concerning the
substantive unfairness of his dismissal to the second respondent.
Grounds of review
In its founding affidavit the applicant relies on two grounds for
the submission that the arbitrator committed a gross irregularity
and therefore misconduct in the performance of his duties :
Firstly, in his reasons for his finding that the dismissal was
procedurally unfair the arbitrator states that no hearing was
held
prior to the sanction being changed. However, he ignores the fact
that the employee was given the opportunity to make submissions
on
the changed sanction.
Secondly, the arbitrator gave no reasons for his finding that the
dismissal was substantively unfair. The only reasonable inference
is
that he ignored evidence that the employee’s conduct could
have been fatal and that other employees who committed the
same
misconduct had been dismissed.
Procedural unfairness
The applicant in its supplementary affidavit does not advance
additional grounds for review but concedes that that on the
procedural
aspect since the employee was given a post as opposed to
a pre-dismissal hearing does not cure the procedural shortcoming but
does mitigate it. Accordingly the quantum of compensation should not
be extensive and should be determined by this court.
Mr Bekker confirmed the two grounds relied upon and submitted in
amplification thereof that the arbitrator misconstrued the issue
to
be determined in that it is clear from the referral, the answering
affidavit as well as the pre-arbitration agreement that
he was not
required to determine procedural fairness. The only issue before him
was the substantive fairness of the dismissal
and he was only
required to determine whether dismissal was an appropriate sanction.
Mr Bekker submitted further that it is clear from the
pre-arbitration minute that the following issues are not in dispute,
i.e. the employee was aware of the rule; the rule was fairly and
consistently applied; and the merits of the matter are not in
dispute as the employee pleaded guilty during the entire process.
This made it clear that the third respondent conceded that
the
applicant acted fairly and consistently in disciplining for this
type of offence and the only issue to be determined was
the last
factor in the Code of Good Practice: Dismissal i.e. whether
dismissal was the appropriate sanction. In addition the
applicant
explained its reasons for the revised sanction in its memoranda as
being based on severity of the misconduct and precedents.
The
applicant also acted fairly in giving him the opportunity to make
submissions on the appropriateness dismissal as a sanction
for the
misconduct, even though this was
ex post facto.
In this
context he submitted that the conclusion of procedural fairness is
not based on any apparent reasoning whatsoever, constitutes
a gross
irregularity and reflects misconduct in the performance of the
arbitrator’s duties.
However even if the arbitrator is correct in determining procedural
unfairness (which is not conceded), Mr Bekker submitted that
the
arbitrator was still required to determine the substantive fairness
of the dismissal as a procedural flaw does not necessarily
render a
dismissal substantively unfair, as he appears to have concluded. A
proper consideration of substantive fairness would
have led to the
conclusion that dismissal was an appropriate and fair sanction. In
any event compensation is the only competent
relief for procedural
unfairness and the arbitrator exceeded his powers in reinstating the
employee. The third respondent admits
in its answering affidavit
that the issue is only whether the applicant was justified in
altering the sanction, and further confirms
that the employee
admitted guilt which is a sign of remorse and relevant to
mitigation.
Mr Bekker submitted that in law there is no absolute prohibition on
an employer reviewing the sanction of a disciplinary chairperson
and
substituting it with a different sanction. This was accepted in
Semenya and Others v CCMA and Others
1
where the court held that “…
although generally
speaking such an opportunity (an opportunity to be heard) should be
given before the decision can be taken,
there are circumstances
where an opportunity to be heard that is given after the decision
has been taken is acceptable
”. The applicant was therefore
not required to hold a formal enquiry prior to amending the sanction
provided the employee
was given the opportunity to make
representations. In this regard he submitted that the arbitrator
misconstrued
Branford v Metrorail Services (Durban) and Others
2
where the Labour Appeal Court rejected the approach that further
disciplinary action is permissible only in exceptional circumstances
and confirmed that the test is one of fairness, which requires the
interests of both the employer and employee to be taken into
account. The fairness test was confirmed in
MEC Finance, Kwazulu
Natal and Another v Dorkin N.O and Another.
3
The Labour Court has also confirmed the principle that an employer
is entitled to revisit a disciplinary penalty. In this regard
Mr
Bekker relied on the following
dictum
of Van Niekerk J in
Samson v CCMA and Others :
4
It is not disputed in these proceedings that the Applicant’s
misconduct was serious, or that the company’s disciplinary
code
prescribed dismissal as the appropriate penalty for employees found
guilty of distributing pornography. In these circumstances,
I fail to
appreciate how it can be said that the Commissioner, in concluding
that the company’s failure to afford the Applicant
a hearing
before Gazendam when he considered the appropriateness of the penalty
imposed by Hawley did not render the Applicant’s
dismissal
procedurally fair can be said to constitute a gross irregularity, or
that it is a decision to which no reasonable decision
maker could
come.
The arbitrator therefore misconstrued the approach of the Labour
Appeal Court and his reliance on
BMW (SA) (Pty) Ltd v Van der
Walt
5
is also incorrect in that it is clear that a formal disciplinary
hearing was held.
Substantive unfairness
The crux of the matter however, Mr Bekker submitted, is that the
arbitrator ignored evidence (that he himself alluded to) to
the
effect that the employee’s conduct could have been fatal and
that other employees who committed the same offence had
been
dismissed. He therefore failed to have regard to the seriousness of
the offence and the principle of consistency in discipline.
He
displayed no obvious reasoning in his determination of substantive
unfairness and simply conclude
s
that the dismissal was
substantively unfair because “the appropriate sanction was
changed unfairly.” This is a gross
irregularity in
circumstances where the employee had pleaded guilty at the
disciplinary enquiry and the arbitrator was required
to determine
only the appropriateness of the sanction
.
In amplification of this ground Mr Bekker submitted that in reaching
the conclusion on substantive unfairness the arbitrator
failed to
apply his mind to the undisputed evidence that it was common
practice at the applicant to review the disciplinary decisions
of
chairpersons and that this was not prohibited in the applicant’s
Disciplinary Code, which emphasised the responsibility
of management
to ensure consistency and fairness in discipline. Robert Kendall,
the Manager – Engineering Shaft and Surface
Environment also
testified that disciplinary sanctions had been reviewed by
management on more than one occasion in the 19 years
that he had
been in employment with the applicant. Kendall further confirmed
that he had a meeting with the employee’s
union representative
on the same day he was handed the memorandum regarding the revised
sanction. The arbitrator failed to have
regard to this and instead
deviated into an irrelevant discussion on the principal agent
relationship. The applicant’s
evidence that similar misconduct
had resulted in dismissal of a number of employees in the past; had
led to a fatal incident
in 2006; and was considered to be very
serious misconduct was not challenged. Kendall further confirmed
that the trust relationship
had broken down and it was never put to
him that this was not the case. In this regard the employee relies
solely on the fact
that he continued working for a month before the
sanction was changed. The employee led no evidence to dispute the
applicant’s
version that consistency and fairness were the key
factors and that management was entitled to revisit the decision of
an inexperienced
chairperson who failed to appreciate the severity
of the offence. It was therefore not disputed during the arbitration
that the
misconduct that the employee had pleaded guilty to was a
very serious breach of the applicant’s safety policies, in
respect
of which discipline was consistently applied and that such a
breach warranted a sanction of dismissal.
The arbitration award
The arbitrator records the evidence of Kendall that he differed with
the view of the chairperson as he is the one who maintains
discipline on the shaft, and that there were employees dismissed for
similar misconduct in the past. He admitted that the employee
had
continued to work for thirty days after the warning but stated that
the chairperson had been subjected to counselling. In
relation to
the employee’s evidence the arbitrator records that he pleaded
guilty to the charge.
In his analysis of evidence and arguments the arbitrator states that
he is guided by the Code of Good Practice: Dismissal in
the
determination of the dispute. The reflects that the crux of the
dispute is that the employee was “charged, pleaded
guilty and
given a final written warning, he worked for thirty days and the
sanction was changed to dismissal.” He notes
the applicant’s
contention that the chairperson of the hearing did not take account
of the seriousness of the charge as
well as the past discipline to
other employees for similar misconduct. He then refers to the
decisions cited by the applicant,
i.e.
BMW (supra)
wherein it
was held that the employer acted fairly in reconstituting the
disciplinary hearing and imposing a new sanction. He
finds that this
is consistent with the approach in
Branford (supra)
but
distinguishes this decision as dealing with an instance where the
supervisor imposes a warning without a formal disciplinary
hearing
which was later altered by a duly constituted disciplinary hearing
into a dismissal.
The arbitrator concludes by referring to
Greater Letaba Local
Municipality v Mankgabe N.O & Others
6
where he says the court emphasised that the employer is entitled to
ensure fairness but that the employee is equally entitled
to be
heard before the sanction can be changed. He concludes as follows :
[t]he evidence before me suggests that the [employee] was only
advised that the sanction was changed from final written warning to
dismissal. There is no evidence to suggest that he was allowed to
make representations before the sanction could be changed. There
is a
principle of agency that says the principal is bound by the conduct
of the agent. Applied to the facts before me that principle
would
entail that the [applicant] is bound by the conduct of the
chairperson who acted upon its mandate. Further, it takes (sic)
into
account that the [applicant] did not allow the [employee] to present
his case when the sanction was reviewed, it goes without
saying that
the employer’s conduct was unfair and as such did not meet the
standard of fairness laid down in the BMW case
referred to above.
On this basis he proceeds to find that the dismissal was
“substantively and procedurally unfair (the appropriate
sanction
was changed unfairly”); confirms the final written
warning and orders the employee to be reinstated.
The review test
It is now well-established that this court is entitled to set aside
an arbitration award if and only if the arbitrator’s
decision
falls outside of a band of decisions to which no reasonable person
could come on the available evidence:
Sidumo & another v
Rustenburg Platinum Mines Ltd & others.
7
At paragraph [110] of the judgment, the court set out the test as
follows:
To summarise, Carephone held that section 145 of the LRA was
suffused by the then constitutional standard that the outcome of an
administrative decision should be justifiable in relation to the
reasons given for it. The better approach is that section 145
is now
suffused by the constitutional standard of reasonableness. That
standard is the one explained in Bato Star: Is the decision
reached
by the commissioner one that a reasonable decision-maker could not
reach? Applying it will give effect not only to the
constitutional
right to fair labour practices, but also to the right to
administrative action which is lawful, reasonable and procedurally
fair
.
In
Bestel v Astral Operations Ltd & others
8
the Labour Appeal Court stated that what is paramount is the
justification for the arbitrator’s decision, rather than it
being considered correct. In other words, what the reviewing court
considers to be a better decision on the available evidence
is
irrelevant. This approach maintains the necessary distinction
between an appeal on the one hand and the scope of the right
of
review contemplated by the LRA on the other.
The strict application of the test for review was emphasised by
Zondo JP in
Fidelity Cash Management (Pty) Ltd v Commission for
Conciliation, Mediation & Arbitration & others
as
follows:
9
The test enunciated by the Constitutional Court in Sidumo for
determining whether a decision or arbitration award of a CCMA
commissioner
is reasonable is a stringent one that will ensure that
such awards are not lightly interfered with. It will ensure that,
more than
before, and in line with the objectives of the Act and
particularly the primary objective of effective resolution of
disputes,
awards of the CCMA will be finding and binding as long as
it cannot be said that such a decision or award is one that a
reasonable
decision maker could not have made in the circumstances of
the case. It will not be often that an arbitration award is found to
be one which a reasonable decision maker could not have made.
Analysis of the award and submissions
In regard to the submission that the arbitrator misconstrued the
issue to be determined it appears that although the pre-arbitration
agreement reflects that “no issues regarding procedure is in
dispute”, under substantive fairness it records the
issue as
“….process related to dismissal unfair and dismissal is
not the appropriate sanction”. In this context
it cannot be
submitted that the arbitrator’s mandate was clearly
circumscribed and that in dealing with procedural fairness
it cannot
be said that the arbitrator exceeded his mandate or committed
misconduct in the performance of his duties.
Nor can the submission that he misconstrued the law be upheld. In my
view he properly refers to the applicable test being fairness
as was
established by the Labour Appeal Court in
Branford
and
BMW
and makes reference to fairness being equally applicable to the
employer and employee as was established in
Greater Letaba
(supra)
. In
Branford
(which the arbitrator correctly
points out dealt with an instance where a supervisor imposes a
warning and a formal disciplinary
enquiry is then held which changes
the sanction to dismissal) Jafta AJA held as follows (at para
[17]):
Even though, strictly speaking,
there was only one enquiry in the present matter, I am prepared to
approach it on the assumption
that there were two enquiries, as it
was the position in
Van der Walt
’s case, because two
successive punishments were imposed. I shall further assume that the
principle in
Van der Walt
equally applies to the present
matter. In accordance with that principle, the employer is entitled
to hold a second disciplinary
enquiry if it would be fair to do so.
The arbitrator’s award deviates from the aforesaid principle.
Even if the test was
that a second enquiry was permissible only in
exceptional circumstances, the arbitrator would have still failed to,
on the present
facts, apply it and consider issues placed before him.
Even if Mr Bekker is correct that
Greater Letaba
(supra)
is distinguishable on the facts and the arbitrator did not pay heed
to this because in that matter the employee was dismissed
summarily
after the sanction was
mero motu
changed to one of dismissal
and in
casu
he was given the opportunity to make
representations
albeit
after the event, the arbitrator’s
error cannot be said to constitute a gross irregularity. In fact it
would seem that the
approach he takes is that the alteration of
sanction by the employer in circumstances where the employee is
given an opportunity
after the event to make submissions is
tantamount to a unilateral alteration.
I further agree with the submission made by Mr Malan that given the
concession in the supplementary affidavit regarding procedural
fairness the applicant cannot seriously contend that the arbitrator
failed to apply his mind to the evidence and submissions
on this
issue. This concession on its own renders the first ground of review
unsustainable. The arbitrator therefore cannot be
said to have
committed a gross irregularity or made an unreasonable decision when
he found on the evidence that “the respondent
did not allow
the applicant to present his case when the sanction was reviewed, it
goes without saying that the employer’s
conduct was unfair and
as such did not meet the standard of fairness laid down in the
BMW
case
10
….In
the final analysis I find that the changing of the sanction in the
circumstances was unfair and the sanction of dismissal
ought to be
changed”. The arbitrator’s conclusion on procedural
fairness therefore cannot be faulted.
Mr Malan, appearing for the third respondent, submitted that the
decisions in
Branford
and
Semenya
are clear that the
circumstances in each case will determine whether or not granting an
opportunity to be heard after the relevant
decision is taken
complies with
audi alteram partem.
They also deal with the
fairness of a second disciplinary enquiry and in this context the
requirement is that the opportunity
to be heard must be fair. In
casu
the employee was not given a second opportunity to be
heard in respect of sanction or mitigation, nor was he afforded the
benefit
of a hearing
de novo.
He was simply informed that the
sanction had been changed to one of dismissal and afforded the
opportunity to make written representations
“should [he] feel
that the sanction of dismissal is unfair…”
I agree with Mr Malan that the approach of the applicant was
therefore nothing short of shifting the onus onto the employee to
prove his innocence. It is trite that section 192 (2) of the LRA
places the onus on the applicant to adduce sufficient evidence
to
prove that dismissal is fair, in other words that it is the
appropriate sanction in the circumstances. In this regard the
applicant adduced no evidence before the arbitrator to show that, at
the very least, it confronted the employee with the reasons
for
changing the sanction to that of dismissal. This would have afforded
him a proper opportunity to respond to those reasons
and to defend
himself. Moreover, Kendall was the only witness for the applicant
and despite his lack of participation in the
disciplinary enquiry he
made the recommendation to Gonsalves that the sanction should be
changed. Gonsalves acted on his recommendation
but did not give
evidence about the facts he may or may not have considered in
arriving at his decision, or as to his reasons
for doing so or for
rejecting the representations of the employee and confirming the
changed sanction. In these circumstances
the applicant unilaterally
reviewed the finding of the chairperson and incorrectly submits that
this is consistent with its Disciplinary
Code and/or that it
constitutes common practice at the applicant. Indeed the contrary
appears to be the case in that there was
no evidence before the
arbitrator that the Disciplinary Code makes provision for overriding
a disciplinary decision in these
circumstances (or even in
circumstances where, as the applicant suggests, the chairperson was
inexperienced).
The Labour Appeal Court has clearly held that without a provision in
the employer’s code permitting the managing director
to
interfere with the decision of a disciplinary enquiry chairperson,
such interference was unjustified : see
County Fair Foods (Pty)
Ltd v Commission for Conciliation, Mediation and Arbitration.
11
The employer does not have
carte blanche
to disregard the
provisions of its disciplinary code when it is convenient, and in
engaging in the unilateral override of the
disciplinary enquiry
chairperson’s decision management committed an act of
procedural unfairness and the arbitrator cannot
be faulted on the
basis of
Sidumo
or otherwise for finding that the evidence
confirmed this. In effect the decision of the chairperson could be
said in these circumstances
to be
res judicata.
He is
moreover in this capacity, as the arbitrator correctly points out,
an agent of the applicant and whether or not he performs
his duties
competently or not is no relevance to the employee.
In my view in this context the arbitrator cannot be said to have
failed to apply his mind or to have committed any other gross
irregularity. He appears to have applied his own assessment of
fairness based on the facts and the law and his conclusion cannot
be
faulted even if this court would differ in its assessment of
fairness. In
Branford (supra)
Jafta AJA (as he then was) held
as follows :
“
The concept of fairness, in this regard,
applies to both employer and the employee. It involves the balancing
of competing and sometimes
conflicting interests of the employer, on
the one hand, and the employee on the other. The weight to be
attached to those respective
interests depends largely on the overall
circumstances of each case.”
12
In regard to the conclusion that the dismissal was substantively
unfair, Mr Malan submitted that the absence of detailed reasons
does
not necessarily justify an adverse inference that the arbitrator
failed to apply his mind. The enquiry for purposes of a
review is
more accurately whether evidence was placed before him to prove that
the dismissal was the appropriate sanction in
the circumstances. In
this regard except for the say-so by Kendall, there was no objective
evidence to support the allegation
that dismissal was appropriate.
There was also no evidence on the breakdown of the trust
relationship and it is trite that in
the absence of evidence to this
effect a dismissal is unfair: see
Edcon v Pillemer NO &
Others.
13
In fact it was common cause that the employee continued performing
his duties for a month without incident before the sanction
was
changed. The applicant furthermore failed to place before the
arbitrator proper evidence to support the bald allegation that
other
employees had been dismissed for similar misconduct. Lastly, there
was no evidence before the arbitrator that the applicant
had a
practice of reviewing disciplinary enquiry chairpersons or that it
had reserved the right in this instance to do so, or
indeed that
this was a practice provided for in the Disciplinary Code. This was
not the import of Kendall’s evidence and
in this regard the
present matter is distinguishable from
Samson
where there was
evidence to the effect that it was a practice to review.
In casu
the only evidence was to the effect that the Disciplinary Code
provides for consistency and fairness and this was the reason
for
the amendment of the sanction. However this cannot
per se
justify a review by management of the sanction in these
circumstances. Consistency and fairness remain principles of law
that
must be established. Mr Malan further submitted that in any
event notwithstanding the employee’s plea of guilty, if regard
is has to his explanation for his conduct and the full context
thereof (which appears from the disciplinary enquiry record),
his
dismissal cannot be said to have been substantively fair. Therefore,
he submitted that the arbitrator did determine whether
or not, given
the guilt of the employee and all the circumstances, dismissal was
an appropriate sanction.
14
On this point however I am in agreement with Mr Bekker that although
the failure or omission by the commissioner to provide reasons
does
not
per se
render the award irrational and therefore
reviewable on the grounds of irregularity, as was held by Pillay J
in
Amalgamated Pharmaceuticals Limited v Grobler N.O and Others,
15
there has to be at least some indication of an obvious reasoning
process as to why a remedy was granted or a decision made. The
award
is deficient in this regard and it can be inferred that the
arbitrator did not apply his mind to whether dismissal,
notwithstanding
the defective procedure, was nevertheless an
appropriate sanction given the interests of fairness and
consistency. To the extent
that the arbitrator records the evidence
of Kendall he stops short of indicating whether he rejects the
evidence of dismissal
for similar misconduct in the past and the
fatal accident, nor does he attribute any significance to the
employee’s plea
of guilt other than mentioning it. Even though
it can reasonably be inferred from the award that there was
insufficient evidence
to prove substantive fairness it does not
necessarily follow that these were the same facts and considerations
that the arbitrator
applied his mind to. The submissions made on
behalf of the third respondent are therefore justified, in the
absence of any indication
by the arbitrator of his reasoning process
or indeed his reasons for the conclusion as to substantive fairness.
His only reason
appears to be that there was procedural unfairness
and
a fortiori
the sanction of dismissal was also
substantively unfair. In my view this the kind of gross irregularity
envisaged in
Sidumo
(supra)
that would render the
award unreasonable. The arbitrator therefore failed to determine
whether the dismissal was substantively
unfair, and the finding to
that effect is reviewed and set aside. The matter is remitted to the
second respondent for determination
of this issue only.
Order
In the premises, I make the following order :
The review on the ground that the first respondent’s finding
in respect of procedural fairness is unreasonable is dismissed;
The review on the ground that the first respondent’s finding
in respect of substantive fairness is unreasonable succeeds.
The
matter is remitted to the second respondent for determination of
this issue by a commissioner other than the first respondent.
The applicant does not seek costs in light of the existing
relationship between the parties and there is no order as to costs.
_______________________
Bhoola J
Judge of the Labour Court of South Africa
APPEARANCES
APPLICANT:
W P Bekker
Instructed by Van
Zyl Le Roux Inc.
THIRD RESPONDENT:
M Malan
Instructed by Finger
Phukubje Inc.
1
2006
(27) ILJ 1627 (LAC).
2
2003
(24)
ILJ
2269 (LAC).
3
(2008)
29
ILJ
1707 (LAC).
4
(2010)
31
ILJ
170 (LC), para E to H, page 179.
5
(
2000)
21
ILJ
113
(LAC).
6
[2008]
6 BLLR 229
(LC),
7
[2007]
12 BLLR 1097
(CC)
8
[2011]
2 BLLR 129
(LAC) at para [18].
9
(2008)
29
ILJ
964 (LAC) at paragraph [100]
10
BMW
(SA) (Pty) Ltd v Van der Walt (2000) 21
ILJ
113
(LAC).
11
2003
(24)
ILJ
355 (LAC) at para 23.
12
At
page 2278 para [16].
13
2009
(30)
ILJ
2642 (SCA).
14
BMW
South Africa (Pty) Ltd v Van Der Walt supra
at para [19].
15
(2004)
29
ILJ
523 LC at 525
.